By Yasin Ebrahim
Invesitng.com – The pound continued to flirt with five-month highs against the dollar and should add gains despite mounting concerns. The UK and EU are unlikely to end the stalemate on the post-Brexit talks, which are set to resume next week.
rose 0.15% to $ 1.3051.
UK chief negotiator for Brexit David Frost said the UK will work to iron out key sticking points on a number of measures, including regulatory standards, fisheries and security policies, when the next round of talks begins on August 18.
However, Frost said the UK would not curtail its sovereignty, laws, courts or fishing waters, suggesting that efforts to end the current stalemate will be fraught with difficulties.
Prior to the talks, Irish Prime Minister Micheál Martin said a "landing zone" for the agreement had been created.
However, analysts appear to downplay the prospect of reaching an agreement in the upcoming round of talks, adding to the economically damaging prospect of the UK adopting the World Trade Organization's terms on trade with the EU.
"Since the trade talks have not made any progress so far, it seems increasingly unlikely that an agreement will be reached by the end of the year," said Commerzbank (DE :). “Without such an agreement, trade would then be conducted according to WTO rules from next year onwards, which would be a bitter blow for both sides in real terms, but especially for the British economy, for which the EU is by far the EU's largest trading partner. "
That said, the pound is unlikely to move much to the dollar on the prospect of a no-deal Brexit, as the greenback is expected to continue to decline.
Commerzbank predicts that GBP / USD will hit $ 1.32 by the end of the year and hit a high of $ 1.39 next year.
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